Tesla is slashing employee pay and furloughing all hourly workers in the US after the coronavirus pandemic forced the firm to shutter its California car plant.
The automaker is temporarily cutting pay for salaried employees and furloughing staff on hourly pay, according to a leaked internal email sent to staff Tuesday evening.
The move comes just one month after controversial boss Elon Musk dismissed mounting fears over the outbreak as ‘dumb’.
Tesla plans to resume production of electric cars at its Fremont factory on May 4, said the email from the company’s head of North American HR Valerie Workman seen by CNBC.
Robots work on a Tesla Model X in the factory in Fremont, California: Tesla is slashing employee pay and furloughing all hourly workers after the coronavirus pandemic forced the firm to shutter the plant
Pay cuts are being staggered by seniority level, with Vice Presidents and above taking a 30 percent cut, Directors and above taking a 20 percent cut, and a 10 percent cut for everyone else.
The reduction in salary will continue until the end of the second quarter, the email said.
Furloughed workers will not be paid but will retain their healthcare benefits, it read.
Tesla was forced to halt production at its main car factory in Fremont, California, on March 23.
The automaker is temporarily cutting pay for salaried employees and furloughing staff on hourly pay, according to a leaked internal email sent to staff Tuesday evening
Tesla plans to resume production of electric cars at its Fremont factory (above) on May 4, said the email from the company’s head of North American HR Valerie Workman
Its solar panel factory in New York also closed and at the Nevada Gigafactory the workforce shrank by ‘more than 75 percent.’
Most workers were placed on paid leave but the leaked email shows workers will now be furloughed and not receive any pay.
The email advises staff to seek unemployment benefits.
Any workers who are sick or ‘uncomfortable coming to work’ are also encouraged to stay home.
The company will ‘respect your decision and you will not be penalized’, according to the email.
Musk, who was not referenced in the communication, is known for having notoriously high expectations of his staff.
He has come under fire on several occasions over allegations that his workers are not allowed to take sick days and are expected to spend all their time focused on ‘the mission’.
In 2015, he was slammed when he reportedly disciplined an employee for missing a company meeting because he was attending the birth of his child.
Another employee blew the whistle saying that when he asked Musk if he could leave to see his family, he was told he was ‘definitely not on board with Tesla’s mission and values.’
The move comes just one month after controversial boss Elon Musk dismissed mounting fears over the outbreak as ‘dumb’
In the Tesla ‘Anti-handbook handbook’, leaked in February, employees are told that they must use their ‘Paid time off’ if they have accrued it for sick leave – otherwise they will go unpaid.
The move to cut pay and furlough staff comes as Musk has repeatedly downplayed the severity of the global health crisis.
On March 6, as the world watched the global outbreak unfold, the outspoken boss took to Twitter to dismiss growing fears as ‘dumb’.
‘The coronavirus panic is dumb,’ Musk tweeted.
His flippant comment came the same day the US death toll from coronavirus rose to 17.
Later in the month, he then sparked outrage for a Tweet many deemed irresponsible where he said children were ‘immune’ the virus.
‘Kids are essentially immune, but elderly with existing conditions are vulnerable. Family gatherings with close contact between kids & grandparents probably most risky,’ he tweeted on March 19.
The controversial CEO seemed to backpedal on his flippancy just days later when he pledged to reopen Tesla’s New York factory ‘as soon as humanly possible’ to help make and distribute ventilators for the hard-hit state.
‘Giga New York will reopen for ventilator production as soon as humanly possible. We will do anything in our power to help the citizens of New York,’ the billionaire said in a Tweet on March 25.
Musk also bought 1,000 ventilators in China and shipped them to the US, where he delivered them to a California hospital to help with the treatment of COVID-19 patients.
